Newbie Questions!

Beginner Questions
1

Hi guys,

I would like to ask about currency pairs with regards to their trading sessions.

These are the following assumptions:

  • I have a profitable trading system
  • I trade on a 4hr chart
  • I trade only the Majors

For example, I would like to trade the USDJPY pair.

Qn 1) Do I trade the pair only during the Tokyo or New York session? (since USD and JPY is involved)
I came from a futures-trading background, so what I normally do is to trade SPX when New York equity markets open, trade DAX when European markets are open, etc. Basically, I only trade the indexes during their equity market opening hours. I believe Forex doesn’t work the same way.

Qn 2) Which comes first? Technicals or trading sessions?
Assuming the spread is not an issue at this point.
Let’s say I observe a pretty good setup which fulfils the technical aspect of my criteria, but this setup happens to fall outside of its trading session, do I still go ahead with the trade? In other words, USDJPY has a good 4hr chart setup during the London session.

Qn 3) When/what time do daily candles conclude officially each day? Do all pairs conclude at the same time?
In trading index futures, daily candles are printed after the equity market hours are over.
I cannot possibly use the daily candle that my broker provides on the chart because the daily candle is printed based on their own timings, as such it would be inaccurate.(Different brokers print daily candles at different timings)
However, I’m not sure how this works in Forex.

Thank you once again to everyone and anyone who is able to help.
Cheers! :slight_smile:

2

That’s “the big one”.

That’s the one where most of the people who fail fall down: they [I]don’t[/I] actually have a [U]proven[/U] edge (net positive expectation) at all, and once you’re trading in that situation, the answers to all the other questions more or less cease to be relevant. So well done for having taken care of that first. :cool:

This question is answerable from your testing/evidence/proof that you have a profitable method with an edge. You trade it at whatever hours you’ve proven you have the edge.

Whether it works at other times of day/night, on H4 charts, is [U][I]evidential/probative[/I][/U]. It isn’t a matter of opinion.

Anyone else’s opinion about it is just “[I][U]guessing[/U][/I]”. And being from a futures-trading background yourself, you’ll already know where that leads! :31:

(I trade GBP/USD and EUR/USD myself, and my methods are good and valid for me whenever [I]either[/I] Europe [I]or[/I] the US is in its RTH, but I know that by having proved it, not by asking other people their opinions about it!)

It doesn’t. You can’t assume that your proven, profitable system will only be profitable when either Japan or NY is in its RTH, in the same way that your SPX/ES methods may only be valid during the opening hours of its underlying instrument. But equally, you can’t assume the opposite, either. You need to research, to test and to [U]know[/U]. Anything else is [I][U]guesswork[/U][/I]. (Lots of people may offer that, though, if this is like other threads asking similar questions. It’s up to you whether or not you want to make your trading decisions on that kind of basis.)

There isn’t a “right answer” to this. For some it’s 00.00 GMT; others take 00.00 EST as a default. Some start the “day” with the opening of the NZ/Tokyo sessions (before 00.00 GMT - that makes more sense to me).

Spot forex-trading is 24/5, anyway.

You [I][U]should[/U][/I] be able to adjust the hours for the charting of daily candles within the charting software. (I know there are some that don’t offer that facility, as well, but you don’t have to use them!). If not, there are other services you can use (at pretty low cost) that will enable you to do that, if you need it.

3

As lexys mentioned, there is no right answer. Most of the ‘Do I’, ‘When’ etc. questions are defined by the individual traders and there is no right answer. What could work for one trader may not work for another so you need to address those questions directly at the market via placing live trades. The answer will follow soon enough.